KALGOORLIE (miningweekly.com) – ASX-listed Westgold Resources has unveiled plans to demerge its polymetallic assets in the Northern Territory.

The demerged wholly owned subsidiary will be known as Castile Resources, with Westgold shareholders to receive one Castile share for every four Westgold shares held, with some 98-million Castile shares to be on issue.

Castile’s asset will include the Rover 1 iron-oxide/copper/gold discovery, as well as the Warumpi project, which is south-west of the Rover project.

“This is an exciting development for Westgold, the shareholders of Westgold, Castile and the Northern Territory economy,” said Westgold MD Peter Cook at the Diggers and Dealers conference, on Monday.

“Castile has a number of very exciting, virgin polymetallic discoveries which are worthy of their aggressive and development budgets. By placing these discoveries in their own vehicle, I am hopeful some new mine developments, creating substantial economic output and employment in the Tennant Creek region, can be achieved.”

Castile was proposing to undertake an entitlement offer, on a one-for-one basis, priced at 20c a share, to raise exploration and development funds. Westgold is also in advanced discussions with a proposed underwriter of the entitlement issue, which is expected to provide a further A$19-million of working capital for Castile, setting the subsidiary on the path to project development.

Furthermore, Castile has also inked a sale and purchase agreement with fellow-listed Andromeda Metals to acquire two additional tenements adjacent to the Rover 1 project, under which the subsidiary will pay A$650 000 to acquire the two tenements and all mining information relating to them.

The acquisition would give Castile full ownership of the Rover 1 deposit, which spans across the tenement boundary.

The demerger of Castile was subject to a number of conditions, including guidance from the Australian Taxation Office, and final board approval.

The sale and purchase agreement with Andromeda was also subject to Ministerial approvals.

Cook on Monday said that the demerger of Castile would be completed by November this year.